Introduction: Advantages and Bottlenecks of Ammonia as a Hydrogen Carrier
Hydrogen is expected to serve as a central energy carrier in realising a decarbonised society, but the storage and transport of hydrogen itself present fundamental challenges. Hydrogen is a gaseous element at standard temperature and pressure, with an extremely low energy density. Liquefaction requires extremely low temperatures of -253°C, while high-pressure storage requires high-pressure conditions of 700 atmospheres. Due to these physical constraints, long-distance transport and large-scale storage of hydrogen are technically and economically difficult.
Among hydrogen carrier technologies being considered to solve these challenges—including liquid hydrogen, methylcyclohexane (MCH), and ammonia—ammonia possesses the most superior characteristics. Ammonia has a high hydrogen content of 17.6 wt% and liquefies at -33°C, allowing utilisation of existing petrochemical infrastructure. Annual production and distribution infrastructure of 200 million tons already exists, and safe handling technologies are well established. The International Energy Agency (IEA) analysis clearly demonstrates cost advantages for long-distance transport.
However, to utilise ammonia as a hydrogen carrier, hydrogen extraction technology at consumption sites is essential. This technology is the ammonia cracker. The ammonia decomposition reaction (NH₃ → 0.5N₂ + 1.5H₂) is endothermic and requires high temperatures above 400°C. The economics and reliability of this technology represent the most significant bottleneck determining the feasibility of the entire ammonia hydrogen carrier system.
Early realisation of a hydrogen society urgently requires establishing technically reliable and economically competitive ammonia cracker technology. This paper provides a detailed analysis of various ammonia cracker technologies currently under development and presents guidelines for technology selection.
1. Classification and Principles of Ammonia Cracker Technologies
1.1 Technical Details of External Heating Systems
External heating systems compensate for the endothermic ammonia decomposition reaction (NH₃ → 0.5N₂ + 1.5H₂ – 46kJ/mol) using external combustion furnaces. The reactor consists of dozens to hundreds of parallel tubes, each filled with nickel-based catalysts. Natural gas or produced hydrogen is combusted in the combustion furnace, indirectly heating the reaction tubes at high temperatures of 800-950°C.
The technical advantage of this method lies in the complete separation of combustion and reaction systems. Since combustion gas and reaction gas do not mix, high purity of the produced hydrogen is maintained, and each system can be controlled independently. High-nickel alloys such as Inconel 625 are used for reaction tube materials as countermeasures against nitridation, and alumina-supported nickel catalysts are standardly adopted.
From an engineering maturity perspective, this directly applies to steam methane reforming (SMR) technology, with established design methods, material selection, and control systems. It is a proven technology used in petrochemical plants worldwide, achieving Technology Readiness Level (TRL) 9.
1.2 Technical Details of ATR Systems
ATR systems simultaneously progress ammonia partial oxidation reaction (NH₃ + 0.75O₂ → 0.5N₂ + 1.5H₂O + 317kJ/mol) and decomposition reaction within the catalyst layer, compensating for the endothermic decomposition reaction with heat from the oxidation reaction. Theoretically, external heating is unnecessary, and operation is possible at relatively low temperatures of 600-700°C.
The technical core is oxygen distribution control within the reactor. Insufficient oxygen supply prevents the decomposition reaction from progressing, while excess oxygen causes the combustion of the produced hydrogen. Cobalt-based composite oxides have been developed as catalysts with both oxidation and decomposition functions. In reactor design, uniform mixing of oxygen and ammonia at the inlet and the ability to respond to composition changes during reaction progress are crucial.
Engineering challenges include precise control of oxygen concentration distribution and temperature distribution within the reactor. During scale-up, a uniform oxygen supply and mixing in large reactors become a technical challenge. The impact of water vapour generation from oxidation reactions on catalyst activity is also an important design consideration. Current TRL is at level 6-7.
1.3 Technical Details of Membrane Separation Systems
Membrane separation systems combine conventional ammonia decomposition reactions with selective hydrogen separation using palladium membranes. Palladium membranes selectively permeate only hydrogen at 400-600°C, while nitrogen and ammonia do not permeate. This selective permeation shifts reaction equilibrium toward products, achieving high conversion rates even at low temperatures.
The technical feature is the integration of reaction and separation. Catalysts are filled inside tubular reactors, with tube walls composed of palladium membranes. Hydrogen generated by decomposition immediately permeates through the membrane for separation, allowing reaction to progress without equilibrium constraints. The most significant advantage is the direct production of ultra-high purity hydrogen at 99.99%.
Engineering constraints include extremely high manufacturing costs of palladium membranes, with membrane thickness control and large-area fabrication as technical challenges. Mechanical strength of membranes is limited, with risks of damage from pressure differences and temperature fluctuations. Carbon deposition and sulfur poisoning on membrane surfaces, causing performance degradation, are also concerns for long-term operation.
1.4 Technical Details of Electrochemical Systems
Electrochemical systems achieve ammonia decomposition at significantly lower temperatures than conventional methods by applying direct current to catalyst layers. Research at Waseda University achieved a nearly 100% decomposition rate at 125°C. The application of an electric field creates proton-rich environments on catalyst surfaces, generating new reaction pathways through NH-NH bonding rather than conventional N-N bond formation.
The technical innovation is a dramatic reduction in reaction temperature. The reduction from conventional 800°C to 125°C allows the use of general stainless steel for reactor materials and simplification of insulation and high-temperature piping. Precise reaction rate control through electric power control provides high compatibility with variable renewable energy sources.
Engineering immaturity includes an incomplete understanding of reaction mechanisms, with fundamental challenges such as current distribution control during scale-up, electrode material durability, and power efficiency remaining unresolved. Technologies for uniform electric field application and safety assurance during scale-up are not established, with TRL remaining at level 3-5.
2. Economic Analysis and Cost Structure
2.1 Economic Analysis of External Heating Systems
Current LCOH (Levelized Cost of Hydrogen) for external heating systems is $5.23-6.10/kg-H₂. A detailed analysis of this cost breakdown reveals that ammonia feedstock costs account for $4.63-$ 5.44/kg-H₂ (80-90%). This calculation assumes an ammonia feedstock price of $871/t, requiring approximately 6 kg of ammonia to produce 1 kg of hydrogen. Equipment depreciation costs are $0.27-0.44/kg-H₂ (5-8%), and operating costs are $0.37-0.65/kg-H₂ (7-12%).
The most crucial fact in this structure is that ammonia feedstock costs account for 80-90% of total costs. This structure means that cost reduction effects through plant technology improvements are fundamentally limited. Even if plant construction costs could be halved, overall cost reduction would be only 2-4%.
For cost improvement prospects through technological innovation, if catalyst technology innovations could reduce reaction temperature to 600°C, fuel consumption would be reduced by 25%, improving costs to $4.42-5.10/kg-H₂. Furthermore, achieving ultra-large scale (500 tons/day) could reduce costs to $3.47-3.95/kg-H₂ through economies of scale.
2.2 Economic Analysis of ATR Systems
The most significant constraint of ATR systems is reduced hydrogen yield. While external heating systems achieve a 96% efficiency, ATR systems remain at 78-81%. This is because part of the produced hydrogen is consumed for combustion, requiring more ammonia for the same hydrogen production.
Current estimated LCOH is $6.33-7.07/kg-H₂. The primary cause of this high cost is a 28% increase in ammonia feedstock consumption, resulting from low hydrogen yield. While there is an advantage of not requiring external fuel, increased feedstock costs exceed this benefit.
For cost improvement prospects through technology maturation, if reaction control technology establishment could improve hydrogen yield to 85%, costs would improve to $5.31-5.85/kg-H₂. Furthermore, if catalyst technology innovation could reduce the reaction temperature to 500°C, costs could decrease to $4.90-$ 5.44/kg-H₂ through reductions in equipment material costs.
2.3 Economic Analysis of Membrane Separation Systems
Current LCOH is $6.12-6.87/kg-H₂. The main cause of this high cost is the palladium membrane material costs. Palladium price is approximately $544/kg, making tubular membrane modules with 10μm thickness cost about $2,177/m². A 1,000 kg-H₂/day scale plant requires approximately 500 m² of membrane area, with the membrane materials alone costing $109 million.
For cost improvement through technological innovation, if membrane thickness reduction (10 μm → 5 μm) could halve material costs, the costs would improve to $5.31-$ 5.92/kg-H₂. However, reducing thickness causes a reduction in mechanical strength, making compatibility with practicality difficult. The development of palladium alternative materials is advancing, but materials with equivalent selectivity and permeability have yet to be found.
2.4 Economic Analysis of Electrochemical Systems
Estimated LCOH is $11.43-12.52/kg-H₂. The main cause of this extremely high cost is power consumption. Current technology requires approximately 15-20 kWh to produce 1 kg of hydrogen, and at $0.14/kWh electricity rate, power costs alone account for $2.04-2.72/kg-H₂. Additionally, electrode material costs and DC power supply equipment costs are added.
For cost improvement prospects through technology maturation, if reaction mechanism elucidation and electrode technology improvements could triple power efficiency, power consumption could be reduced to 5-7 kWh/kg-H₂, improving costs to $6.12-7.48/kg-H₂. However, this would still be a higher cost than other methods, limiting prospects to special applications.
3. Technology Maturity and Scale-up Suitability
3.1 Technical Evaluation of Scale-up Suitability
From thermal engineering constraints, external heating systems can independently design heat supply capacity during scale-up due to the separated structure of combustion furnaces and reaction tubes. Processing capacity can be easily expanded by increasing tube numbers, and thermal independence of each tube prevents local problems from affecting the entire system.
For ATR systems, achieving uniform oxygen distribution becomes challenging during scale-up. Radial and axial concentration distribution control becomes complex, increasing risks of local reaction runaway or incomplete decomposition.
Membrane separation systems have physical limits for membrane area expansion, with scale-up depending on the number of membrane modules. However, membrane manufacturing yield and costs become decisive factors hindering scale expansion.
For electrochemical systems, ensuring uniform current distribution during scale-up is a fundamental challenge. Current density distribution non-uniformity accompanying electrode area expansion makes local overheating and catalyst deterioration unavoidable.
3.2 Technical Evaluation of Generalisation Suitability
From a design standardisation perspective, external heating systems can directly apply design standards established in the petrochemical industry (API, ASME, etc.), with globally standard design methods existing. Reaction tube materials, catalyst specifications, and control systems are all standardised.
Other methods require the development of dedicated design standards, requiring individual consideration for each project. Particularly for membrane separation and electrochemical systems, membrane material and electrode material specifications are not established, making generalisation pathways unclear.
Regarding supply chain maturity, equipment and materials used in external heating systems (reaction tubes, catalysts, burners, control equipment) can be procured from existing suppliers, with cost optimisation working through competitive principles. New technologies require dedicated supply chain construction, with inevitable high costs and supply risks from supplier monopoly in the initial stages.
4. Comparative Evaluation and Future Prospects of Each System
4.1 Constraint Analysis by Technology Maturity and Long-term Prospects
Technology Maturity Constraints in the Short Term (2030)
TRL (Technology Readiness Level) differences have a decisive impact on commercialisation speed. External heating systems are TRL 9 (abundant commercial operation experience), ATR systems are TRL 6-7 (demonstration stage), membrane separation systems are TRL 6-7 (component technology demonstration stage), and electrochemical systems are TRL 3-5 (research and development stage).
Considering commercial deployment in 2030, only external heating systems at TRL 9 become reliable options. Through decades of operational experience, external heating systems have systematised troubleshooting, maintenance methods, and safety management technologies. Operator training programs are established, enabling technician training worldwide. New technologies have insufficient operational know-how accumulation, with risks of extended learning periods after commercial operation commencement.
Technology Innovation Scenarios in the Long Term (2050)
Considering the 25-year technology development period toward 2050 carbon neutrality realisation, current TRL constraints are likely to change fundamentally. ATR and membrane separation systems could realistically reach TRL 9 by around 2040, and electrochemical systems could be established as a commercial technology by around 2045.
Technology Innovation Potential of Electrochemical Systems
Expected technological innovations in electrochemical systems include fundamental changes in operating temperature through the establishment of solid electrolyte technology. If high-temperature operation at 400-500°C becomes possible from current ultra-low temperature operation at 125°C, dramatic reaction efficiency improvements could achieve competitiveness. Additionally, a 3-5 times improvement in electrolysis technology efficiency is technically expected to reduce power consumption per unit hydrogen production from the current 15-20 kWh to 5-7 kWh.
Material Technology Innovation for Membrane Separation Systems
For membrane separation systems, the practical application of ceramic separation membranes and metal-organic frameworks (MOFs) as palladium alternatives is key. Technology establishment could reduce membrane material costs from the current $2,177/m² to approximately $218/m² (1/10 reduction). Furthermore, membrane thickness reduction technology to below 1μm could significantly reduce material usage for the same performance.
Technology Improvement Potential for External Heating and ATR Systems
For external heating systems, catalyst technology innovation reducing reaction temperature from the current 700-800°C to 600°C could reduce fuel consumption by 25%. For ATR systems, improving hydrogen yield from the current 78-81% to 85% is set as a technical target, with the expectation of reduced ammonia feedstock usage.
Technology Diversification and Application Area Segmentation
In 2050, technology selection, segmentation by application-specific optimisation rather than single optimal solutions, becomes realistic. A clear definition of application areas utilising each technology’s characteristics is expected to shift from direct competition between technologies to cooperative market sharing.
4.2 Essential Analysis of Hydrogen Production Cost Structure and Long-term Change Predictions
Current (2025) Cost Structure
The most important discovery in ammonia cracker hydrogen production is the essential characteristics of the cost structure. Detailed analysis using external heating systems as baseline revealed LCOH of $5.23-6.10/kg-H₂ breakdown: ammonia feedstock costs occupy $4.63-5.44/kg-H₂ (80-90%), equipment depreciation costs $0.27-0.44/kg-H₂ (5-8%), and operating costs $0.37-0.65/kg-H₂ (7-12%).
The essential challenge this structure shows is that cost reduction effects through plant technology improvements are fundamentally limited at current technology levels. Even if plant construction costs could be halved, overall cost reduction would be only 2-4%. This calculation assumes the current market price level of $871/t for ammonia feedstock and the actual hydrogen yield of 154.4 kg-H₂ per ton of ammonia (considering 87.5% yield).
Serious Cost Challenges of Membrane Separation Systems
For membrane separation systems, the cost of palladium membrane materials represents a significant cost constraint factor. Due to the palladium market price of approximately $40,816/kg, tubular membrane modules with 10μm thickness cost approximately $163,265/m². A 1,000 kg-H₂/day scale plant requires $81.6 billion for membrane materials alone, accounting for most of the entire equipment cost. Consequently, current LCOH for membrane separation systems is estimated at $23.81-28.57/kg-H₂, 4-5 times the cost level compared to other technologies.
Fundamental Changes in Cost Structure by 2050
Over 25 years toward 2050 carbon neutrality realisation, the hydrogen production cost structure is likely to change fundamentally. The most dramatic change is expected for electrochemical systems. If renewable energy generation costs decrease to $0.007-0.014/kWh and electrolysis technology efficiency improves 3-5 times current levels, power consumption-derived cost challenges would be resolved. Current electrochemical LCOH of $11.43-12.52/kg-H₂ could decrease to $1.36-2.72/kg-H₂.
For membrane separation systems, the development of palladium alternative materials becomes an absolute condition for commercialisation. If revolutionary technological innovations enable the practical application of ceramic separation membranes or MOFs, reducing material costs to 1/100th of current levels, membrane material costs could decrease to approximately $1,633/m², potentially improving membrane separation LCOH to $8.16-12.24/kg-H₂. However, even at this level, a higher cost structure than other technologies would continue.
For external heating and ATR systems, the ammonia feedstock cost dependency structure is expected to remain essentially unchanged through 2050. However, large-scale green ammonia production is predicted to reduce ammonia prices from the current $871/t to approximately $408-544/t. This would improve the external heating LCOH to roughly $2.04-$ 3.06/kg-H₂.
Impact of Cost Structure Changes on Technology Selection
Cost structure changes by 2050 could fundamentally change technology selection priorities. Transition from the current feedstock cost-dominant structure to a diversified structure where different cost factors dominate for each technology method is expected. Power costs and equipment efficiency for electrochemical systems, material innovation success for membrane separation systems, and green ammonia procurement costs for external heating and ATR systems become major determining factors.
For membrane separation systems, the establishment of palladium alternative material technology is a prerequisite for commercialisation, and achieving economic competitiveness without this technological innovation is extremely difficult. However, if alternative material technology is established, the potential for demonstrating unique value in ultra-high purity hydrogen markets remains.
4.3 Technology-specific Economic Comparison and 2050 Competitiveness Predictions
Short-term Prospects from Current to 2030
Comparing current LCOH by technology method: external heating $5.23-6.10/kg-H₂, ATR $6.33-7.07/kg-H₂, membrane separation $23.81-28.57/kg-H₂, and electrochemical $11.43-12.52/kg-H₂. Membrane separation has a cost structure significantly exceeding other technologies due to extremely expensive palladium membrane material costs. By 2030, external heating at $3.47-4.42/kg-H₂ offers the best economics, while membrane separation faces difficulty achieving commercial competitiveness without material technology innovation.
Table 4.1 LCOH Comparison by Technology Method (Revised: Current-2050)
| Technology Method | 2025 Current | 2030 Forecast | 2050 Forecast | Major Improvement Factors (2050) | 2050 Competitiveness |
| External Heating | $5.23-6.10 | $3.47-4.42 | $2.04-3.06 | Green ammonia, ultra-large scale | Superior for large-scale integrated |
| ATR | $6.33-7.07 | $4.90-5.85 | $2.38-3.40 | Yield improvement, CCUS integration | Superior for medium-scale distributed |
| Membrane Separation | $23.81-28.57 | $19.05-23.81 | $8.16-12.24* | Revolutionary alternative material development | Limited to special applications** |
| Electrochemical | $11.43-12.52 | $6.12-8.16 | $1.36-2.72 | Dramatic renewable energy cost reduction, efficiency improvement | Superior for variable power integration |
*Assuming 1/100 cost reduction through palladium alternative materials **Absolute condition: establishment of alternative material technology for commercialisation
Possibility of Competitiveness Reversal by 2050
Most notable in 2050 predictions is the electrochemical system competitiveness improvement. Through renewable energy generation costs of $0.007-0.014/kWh, a 3-5 times improvement in electrolysis efficiency, and the realisation of high-temperature operation (400-500°C) through the establishment of solid electrolyte technology, electrochemical LCOH could decrease to $1.36-2.72/kg-H₂. This competes with external heating’s 2050 forecast of $2.04-3.06/kg-H₂, currently the most economical option.
For membrane separation systems, even with a ceramic separation membrane or MOF, practical application achieving 1/100 material cost reduction, LCOH would remain at approximately $8.16-12.24/kg-H₂, continuing a higher cost structure in competition with other technologies. However, in special applications requiring ultra-high purity hydrogen (99.999% or higher), a unique value in quality aspects could secure limited markets.
Long-term Consistency Evaluation with Government Targets
The Japanese government’s hydrogen CIF price target of $2.27/kg-H₂ (2030) becomes achievable for external heating, ATR, and electrochemical systems by 2050. Particularly, electrochemical systems are highly likely to achieve cost competitiveness significantly below government targets through technological innovation.
For membrane separation systems, even with revolutionary material technology innovation realisation, costs would remain 3-5 times government target levels, making commercial competitiveness acquisition in general hydrogen supply applications extremely difficult. Market opportunities for membrane separation systems are expected to be limited to ultra-high purity hydrogen markets, prioritising quality over cost.
Strategic Evaluation of Technology Selection
Technology selection in 2050 enables strategic selection through application-specific optimisation, as three technology methods, excluding membrane separation, achieve competitiveness meeting government targets. For membrane separation systems, the establishment of palladium alternative material technology is a prerequisite for commercialisation, with the success of this technological innovation determining future market entry possibilities.
5. Technology Strategy and Segmentation Scenarios for 2050 Hydrogen Society Realisation
Short-term (2030): Market Establishment through External Heating Systems
Through 2030, external heating systems will be established as mainstream technology in ammonia cracker markets due to technical reliability and economics. TRL 9 operational experience and existing infrastructure utilisation will ensure a stable supply in the early stages of the hydrogen society. Strategic importance during this period lies in creating large-scale hydrogen demand and laying the foundations for a supply system.
Medium-term (2030-2040): Transition Period of Technology Diversification
From the late 2030s, ATR and membrane separation systems will reach TRL 9 and be established as commercial technologies. ATR systems will develop medium-scale distributed markets as core technology for carbon-negative hydrogen production through integration with CO₂ capture and utilisation technology (CCUS). Membrane separation systems will establish unique positions in ultra-high purity hydrogen markets for fuel cell vehicles and semiconductor manufacturing.
Long-term (2040-2050): Optimised Hydrogen Society through Technology Segmentation
At the 2050 carbon neutrality realisation stage, each technology method will form clear segmentation through application-specific optimisation. External heating systems will serve as fundamental technology for large-scale integrated hydrogen production (100+ tons/day), supplying most industrial hydrogen demand. They will realise a stable and economical hydrogen supply for mass-consuming industries like steel, petrochemicals, and ammonia production.
ATR systems will serve as the core of regional distributed energy systems through medium-scale distributed (10-50 tons/day) CCUS integration. As hydrogen supply bases in local cities and industrial complexes, they will contribute to the regional realisation of carbon neutrality through carbon-negative hydrogen production combined with CO₂ capture and utilisation.
Membrane separation systems will monopolise special application markets requiring ultra-high purity hydrogen (99.999% or higher). In fields where hydrogen quality directly impacts product performance—fuel cell vehicles, semiconductor manufacturing, aerospace industry—they will achieve purity levels unattainable by other technologies.
Electrochemical systems will demonstrate value as energy storage systems through cooperative operation with variable renewable energy output. They will contribute to power grid stabilisation by storing surplus solar and wind power as hydrogen and utilising it for power generation during demand peaks.
Table 4.2 2050 Technology Segmentation Scenario (Revised)
| Technology Method | Primary Application | Scale | Features/Advantages | Market Share Forecast | Commercialization Conditions |
| External Heating | Large-scale integrated | 100+ tons/day | Low cost, stable supply | 70-80% | Already established |
| ATR | Medium-scale distributed | 10-50 tons/day | CCUS integration, regional optimisation | 15-20% | Technology maturation progressing |
| Electrochemical | Energy storage | Variable response | Renewable integration, grid stabilisation | 10-15% | Technology innovation required |
| Membrane Separation | Ultra-high purity special applications | 1-5 tons/day | 99.999%+ purity | 1-3%* | Material revolution absolutely required |
*Assuming the palladium alternative material technology establishment
Strategic Positioning Revision for Membrane Separation Systems
Analysis incorporating palladium price realities reveals that current palladium membrane technology struggles to achieve commercial competitiveness due to extremely high material costs. However, membrane separation systems have significant potential to play essential roles in a hydrogen society by 2050. Revolutionary alternative material technologies—ceramic separation membranes, metal-organic frameworks (MOFs), novel alloy materials—offer prospects for fundamental cost structure improvement.
Considering accelerating technological innovation possibilities, if this material technology innovation is realised, membrane separation systems will demonstrate unique value in ultra-high purity applications where hydrogen quality directly impacts product performance: fuel cell vehicles, semiconductor manufacturing, and the aerospace industry. Over a 30-year timespan, breakthroughs overturning current technological common sense are highly likely.
However, technological innovation requires clear market needs as prerequisites. Innovation in membrane separation technology requires reliable growth in ultra-high purity hydrogen markets. When quality-focused hydrogen demand reaches a critical scale through the adoption of fuel cell vehicles, advancements in the semiconductor industry, and expansion in the space industry, large-scale private capital investment in membrane separation technology will commence. Without market opportunities, investment incentives for technological innovation cannot emerge, making ultra-high-purity hydrogen market development and membrane separation technology development mutually dependent.
Strategic Technology Investment Recommendations
For a technology investment strategy toward 2050 hydrogen society realisation, the most rational approach combines short-term concentrated investment in external heating systems to build reliable market foundations while maintaining strategic parallel investment in all technology methods based on medium-to-long-term market growth potential. For membrane separation systems, continuing aggressive R&D investment in palladium alternative materials, parallel with ultra-high purity hydrogen market development, is essential.
Over 30 years of technology development have led to revolutionary advances in materials science, which could fundamentally resolve current cost constraints. For membrane separation systems, if reliable market demand for ultra-high purity hydrogen forms, private investment in material technology revolution will accelerate, potentially achieving technological progress beyond expectations.
In 2050, when technology segmentation is realised, constructing hydrogen supply systems through optimal combinations of multiple technologies according to each technology’s market needs becomes the most rational choice for balancing energy security and economic efficiency. This market-driven technology innovation strategy will establish sustainable technology development supported by reliable demand and proper hydrogen society foundations.
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